POWER & MACDONALD (Civil Disputes) - [2011] ACAT 59

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

POWER & MACDONALD (Civil Dispute) [2011] ACAT 59

XD 403 of 2011

Catchwords: CIVIL DISPUTE – application to set aside default judgment – no reason for not filing a Response to the application in relation to which the default judgment was entered – application refused

Tribunal: Mr A. Anforth, Senior Member

Date of Orders: 11 July 2011
Date of Reasons for Decision: 25 August 2011

IN THE ACT CIVIL & )

ADMINISTRATIVE TRIBUNAL ) FILE NUMBER

XD 403 of 2011

CAROLINE POWER TRADING AS C POWER LAWYERS

Applicant

DAVID EWAN MACDONALD

Respondent

Tribunal : Mr A. Anforth, Senior Member

Date : 11^th July 2011

ORDER

Application to set aside default judgment dated 31/05/11 is dismissed.
The issue of the payment of the judgment debt by instalments may be the subject of a new application.

………………………………..

Mr A. Anforth
Senior Member

REASONS FOR DECISION

On the 6 April 2011, the Applicant lodged an application with the Tribunal claiming the sum of $5835.32 for legal services provided. The claim included $100.80 for interest and $119 for the filing fee in the Tribunal. The claim was accompanied by the itemised account provided to the Respondent.
The Tribunal served the Respondent by mail with the application on
14 April 2011.
The Respondent did not file any Response to the claim and, on 31 May 2011, the Applicant applied for default judgment in the sum of $6123.59.
Default judgment was entered on that day in that amount.
On 8 June 2011, Scanlan’s, Lawyer with Bite, applied on behalf of the Respondent to set aside the default judgment. The application provided no explanation for the failure to file a Response to the original claim. The application indicated that the Respondent was aggrieved by alleged overcharging and various unprofessional conduct by the Applicant. The Respondent had referred the matter to the ACT Law Society. The annexed letter from the Law Society indicated that the complaint was lodged on 26 May 2011.
On 14 June 2011, the Registrar emailed the Respondent’s lawyers and pointed out, inter alia, the absence of any evidence from the Respondent on the issue of why no Response had been filed to the claim served upon them. The Respondent was asked to file such evidence after which the matter would be listed in the usual manner, but would not be heard in chambers.
On 23 June 2011, the Respondent’s lawyers filed a more formal application to set aside the default judgment. This application also did not address the issue of the failure to file any Response to the claim filed by the Applicant. It simply said that the Applicant should not have filed the claim as there were other negotiations occurring between them. However a separate letter from Scanlan’s of the same date indicated:
(a)The Respondent was an aged pensioner who did understand the process for reviewing a bill of legal costs, and
(b)Default judgment had been entered by the time Scanlan’s were retained by the Respondent.
The Respondent annexed copies of documents that are said to have formed part of the negotiations between the parties. The last of these documents was an email from the Respondent personally to the Applicant dated 9 April 2011 in which he demanded $3000 refund from the Applicant of fees already paid and advised that he had raised the matter with the Law Society.
The matter was listed before the Tribunal for 11 July at 10am and notices were served on the parties, including on Scanlan’s, Lawyers with Bite.
On 28 June 2011, the Registrar again emailed Scanlan’s and pointed out that the new application contained no details of who had filed the application to set aside the default judgment and consequently, no contact details were contained in this application. The Registrar assumed that Scanlan’s were the author and asked them to file a properly completed application immediately.
On 28 June 2011, Scanlan’s filed a notice setting out their contact details and affirming that they acted for the Respondent.
On the day of the hearing, the Applicant appeared in person. There was no appearance of the Respondent. Shortly into the ex parte hearing the Tribunal phoned Scanlan’s to ascertain their whereabouts and continuing involvement. Ms Scanlan informed the Tribunal that she had intended to be present at the hearing but had been ill and either misplaced or overlooked the hearing date. The matter proceeded by phone.
Ms Scanlan informed the Tribunal that the Respondent was a 62 year old pensioner. He had retired from a career involved with managing or training people to manage commercial contracts. Although he was not a legal practitioner, he had studied 7 years of law earlier in his life.
Ms Power put that Scanlan’s had been retained by the Respondent since
17 January 2011. Ms Scanlan did not deny this.
Ms Scanlan put to the Tribunal that there were serious issues of overcharging and professional incompetence that were the subject of a complaint to the ACT Law Society. There was some discussion between the parties of the ambit of the dispute from which it became apparent to the Tribunal that there were substantial factual issues in dispute between the parties.
The Tribunal briefly traversed the legislative scheme in the ACT whereby issues of overcharging were a matter for taxation of costs in the Supreme Court or the Family Court. The role of the Law Society was a disciplinary one which could involve issues of gross overcharging. The Tribunal pointed out that the Respondent had failed to exercise his right to taxation of costs and had failed to exercise his right to file a Response (or Defence) to the present claim.
The Tribunal indicated to Ms Scanlan that the in determining whether to set aside the default judgment, it needed to address:
(a)the prima facie merits of the Respondent’s case; and
(b)the reasons for the failure of the Respondent to exercise his rights in a timely manner.
Ms Scanlan offered the explanation that the Respondent was a pensioner and was unfamiliar with his rights.
Ms Power pointed out that at all material times Scanlan’s had been retained by the Respondent so that both defaults in the exercise of rights occurred on their watch. Further, the Respondent himself was an intelligent educated man with a background in law and commercial contracts. He may have recently retired at age 62 but there was no evidence that he was senile. She pointed to the occasions on which she had advised the Respondent of his right to have her bill taxed.
The Tribunal indicated that it was satisfied that a prima case on the merits existed.
The Tribunal was not satisfied that the Respondent had offered any reasonable excuse for failing to exercise his rights to defend the claim on the two occasions in the past.
Ms Scanlan maintained that the default judgement should be set aside because no default judgement should ever have been entered when there was a dispute over the quantum of the bill rendered. The Tribunal pointed out that a claim had been made for a liquidated sum for which the default judgment had been entered.
The Tribunal took up with the parties the possibility of ordering a stay on the judgment pending the outcome of the Law Society complaint. The Applicant was opposed to any such suggestion.
The Tribunal noted that if the Law Society found merit in the Respondent’s claim and ordered any repayment by the Applicant then such an order would be enforced by the Law Society’s disciplinary processes. Thus the Respondent would have a remedy for his grievance that did not depend upon the fate of the present judgment. This was not a case where a failure to set aside or stay the judgment would render nugatory any remedy that the Respondent may, or may not, have in the Law Society.
The Tribunal raised with the Respondent whether there was to be an application to pay the judgment by instalments. Ms Scanlan said that there might be one in due course but at the present instance, the issue was setting aside the judgment.
In the end, the Tribunal was satisfied that the Respondent had sat on his rights, that he was not ignorant of those rights and that he had legal representation at all material times.
The application to set aside the judgment was dismissed.
The Respondent requested reasons for that decision which are those set out above.
The Tribunal adds the caveat that nothing in the above should be taken to imply that there was any finding by the Tribunal of any kind that the Applicant had in fact overcharged or engaged in unprofessional conduct.

………………………………..

Mr A. Anforth
Senior Member

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A FILE NO: XD 11/403

APPLICANT: CAROLINE POWER T/AS POWER LAWYERS
RESPONDENT: DAVID E MACDONALD

COUNSEL APPEARING: APPLICANT:

RESPONDENT:

SOLICITORS: APPLICANT:

RESPONDENT:

OTHER: APPLICANT:

RESPONDENT:
TRIBUNAL MEMBER/S: Mr A. Anforth, Senior Member

DATE/S OF HEARING: 11 July 2011 PLACE: CANBERRA

DATE/S OF O: 25 August 2011 PLACE: CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS: